In this series, The Fix,Entrepreneur Associate Editor Lydia Belanger shares her conversations with founders and executives whose solutions to inefficiencies can inspire others to find new ways to save themselves time, money or hassle.

TouchTunes digitized the jukebox in the mid-90s, and in the years since, it’s updated its platform to incorporate new technologies as they’ve emerged. In 2010, the company rolled out an app that lets users remotely control a watering hole’s soundtrack. It provides a convenient, less intimidating alternative to walking over to the jukebox and selecting a song -- those with the app can DJ from the comfort of their barstools and anonymity of their phones. (So, no one will know you are the one who put on Journey’s “Don't Stop Believing”... again.)

However, not everyone with the TouchTunes app has music top of mind when they’re busy catching up with friends or ordering another round. That’s why the New York-based company has experimented with a range of proximity marketing approaches to prompt its millions of app users to play something.

“The challenge, or the opportunity, is the exact right time to message a user when they’re in a venue with a jukebox,” says TouchTunes CEO Ross Honey. “You can send them the best email in the world, and you might even send it at 8 o’clock on a Friday night, but if they’re not in the bar at that time, it’s quite often going to get forgotten." It’s a challenge TouchTunes has faced in perfecting this seemingly simple task.

Image Credit: Foursquare

The TouchTunes app pushes personalized notifications like this to users when they're in bars where their music preferences align with those of the clientele.

Two common means of sensing when app users are nearby are beacons and geofencing, and TouchTunes has tried both.

Beacons, which are hardware devices that transmit data to nearby smartphones via Bluetooth, are accurate from a location targeting standpoint, but they have limitations, TouchTunes found. For one, users’ devices need to have Bluetooth turned on. Beacons also require someone to visit every bar and install a device -- and change the batteries when they go dead. At one point, Honey says, TouchTunes had 20,000 beacons (at $20 to $25 a pop) deployed across its network of more than 65,000 jukeboxes in the U.S. and Canada, but they were difficult to maintain.

“We used them as a basis to prove out the value of the personalized message,” Honey says.

Geofencing doesn’t require in-person setup or maintenance. The method leverages GPS to send push notifications to app users in a certain geographical areas, often with the goal of enticing them to stop by and make a purchase. TouchTunes wanted to target people inside bars containing its jukeboxes, so it drew tiny geofences around them. The problem was, app users visiting establishments next door mistakenly would receive a push notification every now and then. This would frustrate users, who in some cases would opt out of always-on location-sharing with the app -- or delete the app altogether.

TouchTunes sought a solution that was as scalable as geofencing and as reliable as beacons.

The fixMost people hear the name Foursquare and think of a social network that’s past its prime. Since 2009, users have used the service to “check in” at places, earning recognition (virtual badges or even “mayor” status) for reporting their location, as well as the occasional discount offer for that establishment. Today, Foursquare has data on 105 million places, and it recently surpassed 12 billion check-ins. It moved its check-in functionality to an app called Swarm in 2014, but the data it generates is more important than ever.

The company has found various other uses for its location data, from city guides to licensing its data to companies such as Twitter for location-tagging tweets. But these applications were just the beginning. Foursquare has developed a whole suite of enterprise products in recent years and now calls itself a “location intelligence company.” It has tools that help advertisers target audiences and measure reach, as well as tools that give marketers and businesses insights based on foot traffic.

It also has software for app developers, called Pilgrim SDK, which can determine a user’s location -- and how long they’ve been there -- and ping that person accordingly. It’s been layered into the TouchTunes app since March 2017 and works as long as a user has always-on location-sharing enabled.

Take this hypothetical scenario: a coffee shop and a bar are next door to each other. Pilgrim SDK contains data about those locations and knows what times of day people typically visit them. It incorporates that information and predicts that, if it’s 9 a.m., a person in that immediate vicinity is in the coffee shop, not the bar.

“Specifically Foursquare, vs. other proximity technologies -- whether that be Bluetooth beacons or geofences with GPS -- is just really, fundamentally, the best of both worlds in one package,” Honey says.

The resultsIncreased location accuracy means TouchTunes can send messages to app users at the right times, prompting them to engage more with the app. Year over year, TouchTunes has seen 33 percent growth in mobile revenue.

Users who receive targeted messages when they’re in locations with TouchTunes jukeboxes are 44 percent more likely to purchase music credits than users who do not receive such messages, and they are 66 percent more likely to play a song.

Plus, it seems most users aren’t turned off by the messages they receive from TouchTunes. Since the implementation of Pilgrim SDK, only 1.5 percent of TouchTunes app users have opted out of push notifications.

“That’s really telling us that we are really hitting the right sweet spot of offering a personalized message that is accurate,” Honey says. “It’s hitting someone at the right time, not when they’re at Starbucks next door, and it resonates with them, because they’re saying, ‘Keep sending these messages’ [by not opting out].”

Another takeRegardless of what type of proximity marketing technology a company uses, it’s important to note that location-targeting is just the baseline of personalization, explains Roger Hurni, co-founder of LighthousePE, a Phoenix-based proximity marketing SaaS platform.

That’s why TouchTunes looks at app user activity to provide relevant suggestions based on individual preferences, songs that are popular in a given bar or a combination. Messages that say something general like, “There’s a jukebox at this bar, go play a song!” aren’t as inspiring as ones that say something like, “We know you love Taylor Swift. She released a new single this week -- play it now!”

When app users get a prompt to enable location-sharing at all times (even when not using a given app), many balk, worrying about their privacy. Personalized messages that provide value to users help assuage these fears, Hurni says.

“You want to engage with a customer at a level that provides the most relevant and personalized promotion or experience possible,” Hurni says, noting that artificial intelligence is helping to improve that aspect. “What is delivered might be a push notification -- or a human. You might want to send that push notification, let’s say, to a concierge at a hotel, so that they can come and greet you.”

This happened to Hurni and his wife on a recent trip to Beijing. Hurni says he checked in via the Four Seasons app, and when he arrived at the hotel, he and his wife were greeted by a concierge carrying a bouquet of roses. (He says the hotel staff had no idea what his line of work was.)

The biggest obstacle to offering this type of VIP service, of course, is app adoption. Attrition rates climb when an app isn’t relevant to a user on a regular basis. Not to mention, many businesses don’t even have an app. The current alternative to app-based proximity marketing, Hurni explains, is targeted advertising on a third-party platform. This is usually based on highly specific demographic information anonymously determined based on a person’s social media or web browsing activity.

“If you have an app, it’s a completely different experience. It can be more personalized, and there are several layers there,” Hurni says. “But ultimately, for marketers or any sort of business engaging in proximity marketing, you really want to find something that is truly behavior based.”

This article has been updated to provide a current example of Foursquare's data licensing.